NEW YORK (GenomeWeb) – Fitch Ratings today affirmed the long-term debt ratings of Agilent Technologies at BBB+ and said that the company's rating outlook is stable.
The rating actions apply to about $1.6 billion of debt as of Oct. 31. Agilent today also said that it completed the spin off of its electronic measurement business called Keysight Technologies, which has begun trading on the New York Stock Exchange under ticker symbol KEYS.
In a statement, Fitch noted that the separation of Keysight has gone "smoothly and largely as expected," as separation costs have remained reasonable. Fitch expects Agilent will continue to improve margins and cash flow in fiscal 2015 to fiscal 2016.
It said, however, that while Agilent holds leading positions in its largest markets, the life science space is highly competitive, and consolidation could remain a key theme. "For Agilent, becoming a major player in diagnostics and genomics may require large-scale aggregate M&A," Fitch said. "However, larger firms may have the ability to outbid Agilent and other mid-sized corporations as new technologies emerge and as consolidation occurs over time."
Among the competitors that Fitch said have greater overall scale and financial flexibility are Thermo Fisher Scientific, Danaher, Abbott Laboratories, and Roche.
"New product launches will be vital for Agilent to maintain leadership positions and to sustain pricing," Fitch said. It affirmed its BBB+ rating for Agilent's long-term issuer default rating; senior unsecured bank facility; and senior unsecured notes.